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Nokia's quarter held no huge surprises, because the key metrics had been per-announced earlier in January. But we did get a close look at underlying ASP mechanics. And the most negative surprise here was that the Lumia ASP was 192 euros, up from 160 euros in 3Q12. Back in the third quarter, Nokia was selling discounted old Lumia models as consumers were anticipating the launch of the new Windows Phone 8 generation of phones. That is why many expected Nokia's Lumia ASP to rebound from 160 euros to 195-197 euros in 4Q12. During the Christmas quarter Nokia launched the high-end Lumia 920 with a non-subsidized retail price above 500 euros and overall ASP likely above 350 euros, even if you factor in special price breaks for AT&T and certain other major operators.

The fact that the Lumia ASP did not bounce higher than 192 euros implies that the Lumia sales mix was still dominated by deeply discounted older models like Lumia 800. These were the phones that drove Nokia's Italian smartphone market share above 10% and helped boost the UK share back above 5%. What is vexing here is that investors still have very little visibility to the underlying demand for premium Windows Phone 8 devices. Nokia's Lumia smartphone volume growth in 4Q12 was still driven by aggressive discounting of phones nearing the end of their life spans - not the new wave of phones.

Obviously, the Chinese launch of the Lumia devices for China Mobile is going to give 1Q13 a notable boost. And the crucially important Lumia 620 seems to be on track to debut in the UK a few weeks earlier than expected, perhaps already at the end of January. But as these new launches take place, the sales of models that drove the 4Q12 performance will wind down. A few weeks ago, the Lumia 800 priced below 160 pounds was the #1 SIM-free smartphone at Amazon.co.uk. Today, it is priced at 200 pounds and it has dropped to #14. Nokia has clearly started unwinding the deep discounting of old Lumia X00 phones and is now segueing into placing the emphasis on new, higher priced Lumia X20 devices.

This means that we will find out only in the coming months whether European and Asian consumers who bought dirt-cheap, old Lumias before the Christmas are willing to spend a bit more on the up-to-date devices. The success of the budget class Lumia 620 has now gained new urgency for Nokia. Few expected Nokia's revenue in Latin America and Asia Pacific to slide between 3Q and 4Q, as we now know it did. Even though Asha-class feature phone volumes are growing rapidly, the cheaper feature phone sales of Nokia are now dropping so fast that Asha cannot offset the deterioration. The mid-range Lumia phone sales have to ramp up fast over the next six months or Nokia is going to face a very hard tumble in LatAm and Asia Pac regions during the spring.

Somewhere next autumn, the specters of a cheaper iPhone and the new BlackBerry Curve loom. Apple was able to maintain an astonishingly robust, $640 ASP level during its Christmas quarter. It does not yet face mix shift towards older iPhones. But the iPhone volume came in below 48 million units; 2-4 million below expectations. Apple may be edging towards a cheaper iPhone as it watches Samsung's volume advantage grow each month that passes by. Nokia has to get its Lumia volumes up quickly before the possible sub-$300 challenger models from RIM and Apple arrive next autumn.